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UK small firms pay lip service to green issues

June 22, 2004

Government emphasis on voluntary environmental action is unlikely to have a significant effect on the environmental practices of SMEs, according to researchers at Kingston University who will present their findings at the Environment and Human Behaviour Programme seminar at the Policy Studies Institute in London on June 23 during ESRC's Social Science Week. The research concluded that small firms pay scant attention to energy saving and minimising waste.

'Most small firm owners do not accept the government line that going green is good for business," says Andrea Revell, who conducted the research with Professor Robert Blackburn at the Small Business Research Centre. 'The ecological footprint of SMEs is very significant,' she explains. 'They make up 99% of all enterprises, and 43% of private sector employment and are estimated to be responsible for 60% of industry's carbon dioxide emissions, 60% of commercial waste and eight out of ten pollution accidents.'

The research findings are based on interviews with 40 owner managers of small businesses in the construction and restaurant sectors in London and Leeds. The researchers also talked with twelve 'informants' within industry, government and academia.

The study revealed that market pressures tended to discourage small businesses from adopting good environmental practices. At worst they generate bad practice, including a builder who admitted his men had uncovered asbestos but didn't dispose of it in the proper way because it would have meant closing down the site. One architect also explained that his clients were simply not interested in sustainable design or construction: 'They're not aware of carbon emissions and the amount that's given off Clients are interested in speed and economy and the way that the market is at the moment.'

One of the restaurant owners admitted that environmental regulations were a 'stumbling bloc because "people won't come to your restaurant because you dispose of your bottles and waste in an environmentally friendlier manner than anybody else. You can't advertise or get any increase in custom from it.'

Many small firm owners did not feel there was enough time in their day to pursue environmental measures that were not a natural bi-product of their core management activities. At the top of the supply chain in the building sector, architects claimed that whilst lip service was paid to sustainability issues within the industry, there was currently little in the way of environmental design occurring in the UK. Several admitted that they would not push the green agenda for fear of alienating clients.

Restaurateurs, on the other hand, claimed to be too busy coping with daily business pressures to think about environmental issues. They did not believe that going green would be a particular draw for their customers. They were seldom asked if their ingredients were locally sourced, organic or GM free.

The inescapable conclusion from the study was that regulation may be the only way to truly effect change within the SME sector. 'Legislative sanctions are clearly one way to be certain that the environment becomes a top business priority for small firm owners,' says Revell. ' Regulation makes the environmental obligations of firms clear from the start, and offers SMEs the security of a 'level playing field' so that environmental good practice is not perceived as a threat to competitiveness.'

'To be truly effective, market based incentives, like landfill taxes need to be combined with the kinds of infrastructure developments that make it easy for firms to be more environmentally proactive," says Andrea Revell.

Economic and Social Research Council (ESRC)